Cost-effectiveness analysis: Balancing value with affordability?

Transcription

1 AMCP Webinar Cost-effectiveness analysis: Balancing value with affordability? Michael Drummond, Dan Danielson and Steven D. Pearson MODERATOR: Michael Drummond, PhD University of York UK 1

2 Cost-Effectiveness Analysis: Balancing Value With Affordability? Michael Drummond Centre for Health Economics, University of York Use of Cost-Effectiveness Analysis Worldwide Cost-effectiveness analysis (CEA) is wellestablished in the formulary decision-making process in many jurisdictions These include around half the countries in the European Union, Canada, Australia and several countries in Asia and Latin America Typically, these countries have large public payers with the resources to evaluate manufacturer submissions Affordability/budget impact is normally assessed However, the role of CEA in the US is uncertain 2

3 Dymaxium Surveys of US Payers Surveyed the 1,200+ US Healthcare Decision Makers registered on the AMCP edossier system in October 2014, April 2015 and September 2015 Between 70 and 100 responses to the three surveys Asked questions about attitudes towards cost-effectiveness and industry-produced models Also, explored the concerns that decisionmakers had about the evidence presented to them and the other sources of evidence they consulted Payers Use of Industry Provided Models How often do they consult industry models: 31.76% Cost-effectiveness Models 65.88% Often Budget Impact Models 37.65% 60% Sometimes Never 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 45 % 28 %

4 Payers Use of Industry Provided Models In what ways do they use industry models? To learn about the manufacturer s clinical data To scrutinize the cost-effectiveness analysis For background information on the disease 91.8% 90.5% 84.7% To help conduct your own analysis To repopulate the model with local data Often/Sometimes Never 84.7% 72.9% What tools and resources do you currently use to assess product affordability? (multiple responses possible) Administrative claims data analyses 52.6% Budget impact models and results Cost-effectiveness models and results 49.5% 48.4% Manufacturer dossiers 48.4% Expert opinion 39.0% Actuarial models and results 22.1% Other 3.2% 0% 10% 20% 30% 40% 50% 60% 4

5 SPEAKER: Dan Danielson, MS, RPH Pharmacy Manager, Clinical Services, Premera Blue Cross. Premera Value Assessment Process 10 5

6 Background Value Based Insurance Design (VBID) Concept: Align out of pocket costs with the value of health services: Different health services have different levels of value Reduce member cost barriers to high value treatments Discourage low value treatments by raising out of pocket costs Expected Result: Improved health outcomes at any level of health care expenditure. Studies show that when barriers are reduced, significant increases in patient compliance with recommended treatments and potential cost savings result -Center for Value-Based Insurance Design -University of Michigan, 11 Background VBRx is built using VBID concepts and is unique in the US market Guiding Principles Premera s core values Transparent processes Evidence based Internal and external decision making committee Leverage input from practicing physicians and other providers Uses clinical and economic data to determine value Academy of Managed Care Pharmacy defines value as: Value in health care relates to whether a medical intervention improves health outcomes enough to justify additional dollars spent compared to another intervention. 12 6

7 Committees Specialized functions; working in tandem not isolation Pharmacy & Therapeutics Committee Clinical evaluation: Safety, effectiveness 7 MDs, 3 pharmacists, 1 lay member no Premera associates Value Assessment Committee 1 MD, PhD, Practicing Internist and Health Economist, Fred Hutchinson Cancer Research Center (chair) 3 PhD Pharmacoeconomist (vice chair) 1 PhD, Bioethics, UW 1 each Community based oncologist Community based cardiologist Lay member 13 How is value measured? Clinical dimension: Incremental Clinical Effectiveness Therapeutic effect size versus Placebo Comparator therapy Cure disease/prolong life or survival (progression free or overall) Adverse effect profile Use/avoidance of use of other medical services Office visits Lab tests Medical procedures 14 7

8 How is value measured? Human dimension : Impacts on patient quality of life Activities of Daily Life Social Role function Spouse/Parent Employment Community Psychological function Clinical and humanistic outcomes drive the quality of life measure Quality Added Life Years (QALY) 15 How is value measured? Economic dimension ($): Incremental Costs versus comparator therapy Costs associated with Drug/procedure costs Treating adverse effects Office visits Lab tests Medical procedures 16 8

9 How is value measured? Incremental cost effectiveness ratio (ICER) $ NOT commonly used in USA Used EU, Canada and elsewhere Validated surveys of actual target patients (or similar) Some caution using surveys conducted outside of target population/country 17 More than a calculation Premera Value Matrix Category Factor Evaluation of Relevant Considerations Clinical Benefit Cost- Effectiveness Analysis Societal Values Research Question Strength of Evidence Safety B Efficacy A Effectiveness B Base Case $20,000-$30,000/QALY High Estimate Low Estimate <$10,000/QALY Ethical Issues Affordability of the s. While cost effective, the costs of these drugs make widespread coverage impossible within a financially responsible manner. Therefore prioritization of treatment given the very high cost is essential. Prioritization needs to guard against discrimination against patients because others disapprove of the behavior that led to infection (needle sharing, etc.) Rare Disease No Yes % of the population has Unmet Need No Yes More effective Other Societal Considerations Potential for. Potential societal impact of is substantial. Budget Impact Analysis Regulatory Issues None noted. Pharmacy Budget Impact Medical Budget Impact Base Case $X PMPM N/A PMPM High Estimate $Y PMPM N/A PMPM Low Estimate $Z PMPM N/A PMPM 18 9

10 Finding economic information Credible sources Center for the Evaluation of Value and Risk in Health (CEVR, Tufts University) CEA Registry National Institute for Health and Care Excellence (NICE) PubMed.gov Institute for Clinical and Economic Review Manufacturers Models Value Assessment Committee Members 19 U.S. Payers Should Use Models Cost effectiveness models Support value based benefit (VBID) designs Reduce copay access barriers to high value drugs Provide means to evaluate drug price Identify clinical nuances and inappropriate pricing Budget impact Complements CEA Supports discussion of affordability Disease based models total costs of care Most of the models we reject are eliminated on clinical grounds, not technical flaws 20 10

11 What Makes a Good Model? Addresses decision makers information needs What decision are they making? What do they need to inform that decision? Which model type best fits the disease state and setting? Has Real World clinical relevance To clinicians and patients in the plan s population Reflects actual clinical practice Models with faulty clinical assumptions will be rejected Uses Transparent methodology Per decision makers guidance (AMCP/ISPOR) Open, unlocked spreadsheets with good documentation 21 What s missing? A measure for health system affordability Just because a product may have good clinical value does not necessarily mean that it is affordable (budget impact). Tesla Model S Nissan Leaf Drugs don t work in patients who don t take them C. Everett Koop 22 11

12 SPEAKER: Steven D. Pearson, MD, MSc President and Founder, Institute for Clinical and Economic Review. Evaluating the Value of New Drugs and Devices 12

13 ICER Value Assessment Policy Development Group* *NB: All participants provided input into the development of the value assessment framework but none should be assumed to approve of its approach Insurers and Pharmacy Benefit Management Companies Aetna Wellpoint Kaiser Permanente OmedaRx Premera America s Health Insurance Plans (AHIP) Patient Organizations FamiliesUSA Physician Specialty Societies ASCO Manufacturers Merck Covidien Lilly GSK Philips Amgen National Pharmaceutical Council (NPC) Biotechnology Industry Organization (BIO) Copyright ICER ICER Value Framework 3.0 Comparative Clinical Effectiveness Incremental cost per clinical outcomes achieved Other benefits or disadvantages Contextual Considerations Care Value Discussed and voted upon during public meetings High Intermediate Low Care Value Discussed and voted upon during public meetings High Intermediate Low Potential Short-Term Health System Budget Impact Provisional Health System Value Discussed and voted upon during public meetings High Intermediate Low Mechanisms to Maximize Health System Value Discussed during public meetings; included in final ICER reports Achieved Health System Value Not evaluated by ICER or voted upon by public panels Copyright ICER

14 Incremental Cost per Outcomes Achieved Comparative Clinical Effectiveness Incremental Cost per Outcomes Achieved Other Benefits or Disadvantages Contextual Considerations Care Value Incremental Cost per Outcomes Achieved Long-term perspective Cost per quality-adjusted life year (QALY) gained Associated with high care value <$100,000/QALY Associated with intermediate care value $ K/QALY Associated with low care value >$150,000/QALY Copyright ICER A Value Assessment Flowchart Comparative Clinical Effectiveness Incremental cost per clinical outcomes achieved Other benefits or disadvantages Contextual Considerations Care Value Discussed and voted upon during public meetings High Intermediate Low Care Value Discussed and voted upon during public meetings High Intermediate Low Potential Short-Term Health System Budget Impact Provisional Health System Value Discussed and voted upon during public meetings High Intermediate Low Mechanisms to Maximize Health System Value Discussed during public meetings; included in final ICER reports Achieved Health System Value Not evaluated by ICER or voted upon by public panels Copyright ICER

15 Provisional Health System Value Care Value Potential Health System Budget Impact Provisional Health System Value Mechanisms to Maximize System Value Achieved Health System Value Integration of long-term care value with consideration of potential short-term budget impact Why short-term budget impact as a part of value? A potential budget impact for an individual drug estimated to contribute significantly to cost growth above some threshold should serve as an alarm bell for greater scrutiny and for efforts to maximize health system value Copyright ICER Potential Budget Impact Threshold How much potential budget impact is too much? Key assumption based on national and state legislation The United States would like to take measures so that overall health care cost growth does not outstrip growth in the national economy Measure The amount of net cost increase per individual new intervention that would contribute to growth in overall health care spending greater than the anticipated growth in national GDP + 1% Copyright ICER

16 Summary of Potential Budget Impact Threshold Calculations Item Parameter Estimate Estimate Source (Drugs) (Devices) 1 Growth in US GDP, (est.) +1% 3.75% 3.75% World Bank, Total health care spending ($) $3.08 trillion $3.08 trillion CMS NHE, Contribution of drug/device spending to total health care spending (%) 13.3% 6.0% CMS NHE, Altarum Institute, Contribution of drug spending to total health care spending ($) (Row 2 x Row 3) 5 Annual threshold for net health care cost growth for ALL new drugs (Row 1 x Row 4) 6 Average annual number of new molecular entity or device approvals, Annual threshold for average cost growth per individual new molecular entity (Row 5 Row 6) 8 Annual threshold for estimated potential budget impact for each individual new molecular entity (doubling of Row 7) $410 billion $185 billion Calculation $15.4 billion $6.9 billion Calculation FDA, 2014 $452 million $301 million Calculation $904 million $603 million Calculation Copyright ICER From Value Assessment to Value-Based Price Benchmarks PCSK9 Drugs List price $14,350 (n=2,636,179) Entresto List price $4,560 (n=1,949,400) Care Value Price: $100K/QALY Care Value Price: $150K/QALY Max Price at Potential Budget Impact Threshold Draft Value Based Price Benchmark $5,404 $7,735 $2,177 $2,177 Max Price at Price to Price to Draft Value Potential Achieve Achieve Based Price Budget Impact $100K/QALY $150K/QALY Benchmark Threshold $9,480 $14,472 $3,779 $3,779 Copyright ICER

17 ICER Drug Assessment Expansion Support from the Laura and John Arnold Foundation (LJAF) Ramping up to produce reports per year on highest impact new drugs near time of FDA approval All reports to be debated in public by independent committees Work with patient, manufacturer, payer, provider, and policymaker communities to enhance uptake and application of reports Copyright ICER 2015 Advancing value assessment and pricing for new drugs For payers Track and use ICER reports to support value-based coverage decisions and benefit designs Make independent value reports an explicit and transparent part of coverage and price negotiation Apply reports to justify non-coverage, step therapy, or other restrictions if improved comparative clinical effectiveness is not demonstrated If price meets a price benchmark Drug gets first tier and low or no co-pay Drug is gold carded with provider groups If price does not meet the benchmark Automatic third tier Reference price to value benchmark: Additional costs paid by patients or manufacturers High prior authorization requirements for providers Copyright ICER

18 Thank you Steven D. Pearson, MD, MSc Copyright ICER 2015 Questions? 18

19 For more information please contact: Jackie Gladman or Stay Tuned Webinar will be posted on the AMCP website. 19